What Does Being a Millionaire Really Mean?

[ScottFromUtah]

Back when I was young, the thought of being a millionaire was like a pie-in-the-sky dream. But nowadays, you almost have to be a millionaire to have any kind of retirement. In fact, from the recent thread on how long it took people to have their first $million, I get the impression that everyone on this forum is a multimillionaire.

But just for fun, I'd like to know how a millionaire is defined. Is there an "official" definition, for example, by the Department of Commerce or a definition that academics use? Is a millionaire someone who has at least $1 million in total assets (including home, pension, savings, investments, lottery winnings, etc.) or is a millionaire someone with at least $1 million in liquid assets?

Or does the idea of millionaire matter any more? Maybe The Millionaire Next Door concept is already dated, and the next version of the book should be The 5-Millionaire Next Door--about ordinary people who have assets of $5 million. Whaddayathinque?

 

[Sam]

I don't know the answer, but

I get the impression that everyone on this forum is a multimillionaire.

I can assure you that your impression is not correct.

 

[Webzter]

>What Does Being a Millionaire Really Mean?

It means that you have more money than me... and, when it comes down to it, that's all that really matters.

edit: seriously though... the only number that ever seemed big to me as a kid was $1 billion. You're talking some serious coin then. If I worked until I was 65 and stayed on my current path, then I'd be doing reasonably well for myself ($10mm in today's dollars). But, seriously, what's the point? $1mm is/was a reasonably benchmark for being FI. While it's not as much as it used to be, it still puts you in the stratosphere when you compare against the general population.

 

[maddythebeagle]

But just for fun, I'd like to know how a millionaire is defined. Is there an "official" definition, for example, by the Department of Commerce or a definition that academics use? Is a millionaire someone who has at least $1 million in total assets (including home, pension, savings, investments, lottery winnings, etc.) or is a millionaire someone with at least $1 million in liquid assets?

Depends on who you ask and frankly, I dont think it really matters except for a pissing match....I have seen several fruitless debates on this on financial webpages, and probably got more people arguing with some parts of the county having huge house value increases while some parts of the country, not so much....

 

[FinanceGeek]

Since the largest single expense most people face is their residence, I'd suggest that the net worth needed to FIRE is largely a function of where you plan to retire, rather than mere possession of any specific absolute number of dollars...

If I were planning on retiring on "only" 1 million (perish the thought! ), I'd probably choose to live someplace where that kind of money would buy me the nicest lifestyle possible. Having visited the left coast many times, I see that $1m is only going to buy me a cookie cutter house, perhaps a larger cookie than most people get, but fundamentally still a mass produced product resembling life in the Borg Collective more than something Bertram Wooster could relate to.

If I had a nest egg of one million dollars, I'd rather take my loot and go someplace where a person with that kind of money still has reasonable buying power. Keeping in mind that the per-capita income in the US is approximately $25k, and the median home price is $230k or so, I think one would do just fine with $1m in many quite-reasonable parts of the US, not to mention many opportunities abroad, even if the coastal types would refer to such locales as being in "flyover country".

 

[old woman]

A million in net worth means you are better off than most people in this country so won't be in abject poverty even if you aren't living rich. Where I live houses run generally between 300-600K for normal livable houses. You can spend less out of town or mobile homes on acreage. So if I ever get to my first million net worth I could sell my house worth maybe 450 and buy one worth 300 so have 700K to invest for income at 4% SWR that won't be a fortune but without house payments and with SS and a roommate I should be fine. It isn't a luxury to have a million unless you are young enough to be able to ignore it and live on your pay not saving for retirement like everyone else your age.

 

[CyclingInvestor]

A million net worth means you are well on your way to ER. If you want to live in LA
or SF or NY or you have a few kids it means you are only a few years away. If you
are single or plan to live in the midwest with no kids, you are already there.

 

[GoodSense]

I can assure you that most people here aren't multi-millionaires. Otherwise that thread would have exploded. There is a thread asking those under 35 what their "magic number" for FIRE is, and only a small number said less than 1 million.

It seems to me that $1 million (today's $) plus a house with no mortgage plus some kind of health insurance is probably good enough for healthy, frugal people with no children in an average-cost city, assuming no pension. (Enough disclaimers??)

 

[kumquat]

When I was young, I waited patiently for John Beresford Tipten. He never arrived.

When I got a bit older and much luckier, I hit the magic number (only investments). When I was young, a millionaire was someone with serious cash. Now it's just someone with a paid for house and some investments, BFD.

A million outside of principal residence is good, but IT AIN'T WHAT I THINK OF AS A MILLIONAIRE!

Enjoy what you have and have enough to enjoy!

 

[Nords]

In fact, from the recent thread on how long it took people to have their first $million, I get the impression that everyone on this forum is a multimillionaire.

That's what you get for attempting to inject a note of truthful credibility into an anonymous Internet forum.

Besides, some posters got their first million three or even four times...

 

[MJ]

When I was young, I waited patiently for John Beresford Tipten. He never arrived.
/quote]

That was 1 million dollars tax free back when the show ran between 1955 to 1960.

What would it be worth now?

MJ

 

[Tadpole]

That was 1 million dollars tax free back when the show ran between 1955 to 1960.

What would it be worth now?

MJ

The inflation calculator at The Inflation Calculator gives the following comparison for 1955 and 2006.

What cost $1000000 in 1955 would cost $7243671.97 in 2006.
Also, if you were to buy exactly the same products in 2006 and 1955,
they would cost you $1000000 and $138051.53 respectively.

 

[Medit8]

Sorry Tadpole, I may be dense, but I can't make sense of that math. Please show some examples.

 

[LOL!]

What Does Being a Millionaire Really Mean?

It means that the bogeyman INFLATION has caught up with you.

 

[dex]

The inflation calculator at The Inflation Calculator gives the following comparison for 1955 and 2006.

What cost $1000000 in 1955 would cost $7243671.97 in 2006.
Also, if you were to buy exactly the same products in 2006 and 1955,
they would cost you $1000000 and $138051.53 respectively.

I'm guessing you the first one is applying inflation; the second actual cost today for 1955 products?

 

[Cattusbabe]

What it means to me is having the freedom to do with my time (a limited resource) what I want while maintaining my life style because my money works for me. Each person has a different number for that. When I hit mine I FIREed.

 

[Helen]

I think being a millionaire means you have a net worth of a million dollars. Being wealthy, on the other hand, is quite subjective.

 

[Geoffrey]

What does being a millionaire really mean? Hmmm. Not much – it’s just a number. I thought 7 figures had some magical significance until I reached that plateau a couple of years ago and realized that nothing in my life had changed – I still live in the same house, I still drive the same care, I am still married to the same person, I still socialize with the same people, and I am still working and saving for retirement.

 

[MasterBlaster]

Here is a recent photo...

Being a millionaire means many things...

To me it means going to the club, grooming my polo ponies, dining on caviar and Champagne in my cavernous dining room with a long table set with candelabra. People who know me love my elegant and sophisticated lifestyle. I like to wear an ascot or riding chaps so that people know that I am sophisticated.

 

[SecondCor521]

dex and medit8,

Look at the numbers again carefully. I think the first one is taking $1M in 1955 dollars and inflating it forward to 2006, the second one is taking $1M in 2006 dollars and "un-inflating" it backward to 1955.

2Cor521

 

[kcowan]

Saw an interview with Branson at his island in the Caribbean. In the interview, he mentioned that he reached his first Billion back in the mid-80s "when a Billion really meant something."

I think that pretty well sums it up. What it means depends on your perspective.

 

[lazygood4nothinbum]

being a millionaire means i have more than i need.

 

[Mach]

Being a millionaire means...

A lot less now than it use to. The inflation calc shows that best. 3-5M feels more like millionaire in terms of how you can live your life. 1-1.5M seems to get you out of work, but still in a middle-class lifestyle. Seems like "millionaire" should both get you free + some luxury.
Net worth would be the measure to use I'd assume.

But really, Master Blaster's description struck a chord with me. *wiping tears from eyes*

-Mach

 

[kaudrey]

However you define it, I'm not there yet either. Hope to be in the next two years, though!

 

[dessert]

I must be a clone of Geoffrey!

What does being a millionaire really mean? Hmmm. Not much – it’s just a number. I thought 7 figures had some magical significance until I reached that plateau a couple of years ago and realized that nothing in my life had changed – I still live in the same house, I still drive the same care, I am still married to the same person, I still socialize with the same people, and I am still working and saving for retirement.

My sentiments exactly! I couldn't have said it better. That's me!